Los Angeles-based LBG Real Estate Companies has always focused on opportunistic investments, but it’s revved up its game recently as it cultivates two customer-oriented shopping attractions out West.
The privately held real estate investment company has been busy adding innovative retailers and restaurants to the Village Medford Center, a 420,000-square-foot lifestyle center in southern Oregon undergoing a $10 million renovation. Down the coast, LBG is also executing a rebranding and re-tenanting plan at its recently acquired the Shops at Hilltop, a 1.2-million-square-foot shopping center in the San Francisco East Bay submarket of Richmond, California.
Leslie Lundin, managing partner at LBG, believes this is the pivotal time to undertake such endeavors as consumers focus on new, novel and noteworthy.
“In today’s retail environment, you have to attract a range of ages that includes locals as well as tourists,” she notes. “This combination is the hallmark of the re-imagined retail environment, which is proving to be successful.”
MIND OVER MEDFORD
Just north of the California border sits Medford, Oregon, a town that values family, health and the great outdoors. LBG is incorporating these local values into its Village Medford Center redevelopment as it enhances its architectural and landscape designs, including a pedestrian plaza and an 80-foot architectural tower that will be visible from the Interstate 5, attracting those passing in and out of the state.
Two of the Village’s anchors are also being reimagined. Tinseltown Theater received a completely revamped interior that now features luxury recliner seating and new food and drink offerings that will soon include alcoholic beverages. International Fitness also underwent a makeover, emerging as Village Fitness with a fully remodeled interior, as well as new management, equipment and programming.
LBG’s reinvestment efforts didn’t go unnoticed, as five new tenants recently signed onto Village Medford Center. They include a variety of local entrepreneurs who have gained a following in and around the Medford community. Salon veteran Trisha Mahoney branched off to open her own outpost, Adorn Waxing & Skincare Studio, at the center after more than a decade in the industry. Meanwhile, Adam Nadow debuted his own Fudoshin Brazilian Jiu Jitsu studio this past July next to Panache Dance Co., which was founded by dance teacher and nearby Rogue Valley native Sydney Smedley. These businesses have created a fitness and healthy lifestyle hub at Village Medford Center.
In a sign of the times, two online-only companies have also chosen Village Medford for their inaugural brick-and-mortar locations. Fashion Institute of Design & Merchandising graduate Rocky Sharpe opened her first Simply Sharpe Boutique storefront selling high-end women’s clothing and accessories near the Tinseltown box office, while Ashley Lacer opened the complementary affordable women’s clothing store Ella Lane Boutique across the way.
As pure-play retail dies off and omnichannel continues to gain steam, David Goldman, managing partner at LBG, believes we will continue to see new artisans move their operations from the web to a more balanced bricks-and-clicks strategy.
“The marriage of e-tailing and brick and mortar is becoming commonplace and necessary for the success of both,” he says. “This is all part of the evolution of retail.” These types of tenants will be especially active, Goldman notes, in neighborhood centers within tightknit communities like Medford.
“Both of these tenants were local residents who had strong online and local followings,” he continues. “They believed that the next natural step in their growth was to create a physical presence, which can most efficiently be achieved through brick-and-mortar locations.”
CATERING TO THE MASSES
Medford may have made it loud and clear that this community prefers local, but farther south, LBG is going global. The company purchased the flailing 77-acre Hilltop Mall just 20 miles northeast of San Francisco with its partner in July 2017. At the time, the 1.2-million-square-foot mall had been foreclosed upon, having experienced a barrage of distressed owners for at least five years prior to the sale.
LBG’s reimagined vision for the center was inspired, in part, by one very crucial fact.
“We are proactively responding to not only significant overall population growth projected for the East Bay region in the years ahead, but also to cultural marketplace shifts that are currently taking place in the Shops at Hilltop’s core trade area,” Lundin explains. “Currently estimated at 22 percent, dramatic growth among the region’s Asian population is projected to increase over 10 percent by 2023.”
The Shops at Hilltop is situated within a residential trade area that boasts more than 1.2 million permanent residents in 483,000 households. The area is experiencing significant population growth in general, but particularly among its Asian population. The influence and buying powers of this demographic shouldn’t be underestimated, Lundin says, citing Nielsen Company’s recent findings. These findings, released in a May 2018 report titled “Asian-Americans: Digital Lives and Growing Influence,” note that Asian-American buying power increased by 257 percent from 2000 to 2017, exceeding increases in buying power for all other racial and ethnic groups. The demographic’s buying power currently sits at $986 billion and is projected to reach $1.3 trillion in 2022. The Asian-American population has also grown by 43 percent, at a faster pace than any other U.S. race or ethnicity. This is particularly pertinent in California, where Asian-American consumer spending ranks the highest at $323 billion.
With figures like these, not to mention a JC Penney store set to close, LBG decided to pivot when it came to rebranding the Shops at Hilltop.
“We’re not only working to fill a much-needed void in an underserved West Coast marketplace, but we are creating unique synergies between our core consumer constituency and an expanded tenant mix via a culturally sensitive remerchandising strategy that is designed to effectively meet our customers’ needs and their wants,” Lundin says. “It is these synergies that will result in an impressive end product where the Shops at Hilltop will be defined as an all-inclusive destination that offers a well-rounded consumer experience — one that instantly differentiates the center from its regional competition.”
This new strategy started with the announcement that leading Asian supermarket chain 99 Ranch Market would anchor the center along with existing names like Macy’s, Sears, Walmart and 24 Hour Fitness. The market will feature an 11,000-square-foot food court that will sit at the pinnacle of Hilltop’s transformation from an enclosed mall to an all-inclusive, multi-cultural shopping and entertainment destination.
Though the center’s cultural roots may be inspired by far-off lands, LBG is once again going local, sourcing tenants within the San Francisco and East Bay communities that its shoppers have grown to know and love.
“Hilltop is really a reflection of the trade area demographic shifts, combined with the shop local movement, which prizes locally based tenants,” Goldman adds. “We are focused on bringing in the best of the Bay Area. Many of the tenants we are bringing to Hilltop are successful South Bay establishments that are looking for an East Bay location because they see the need in the market.”
This “need” will soon grow. The Shops at Hilltop is part of a larger Hilltop by the Bay redevelopment plan that will create the live-work-play-stay mixed-use community within Richmond that has become ever-popular with today’s consumers and retailers. In-place zoning and entitled land parcels that encompass the 77-acre Hilltop Mall Road site are scheduled to receive limited-use business hotels, a variety of residential uses, and a mix of office spaces that include conventional, creative, co-working and medical uses.
Aside from the new market and corresponding food court, LBG is responding to this need by adding a new 300,000-square-foot outlet shopping component, an expanded collection of food and beverage concepts primarily focused on Asian cuisine, and family friendly entertainment and services to Hilltop’s retail component.
These tenant remerchandising efforts will be complemented by updated community gathering spots, major interior and exterior renovations, new and dynamic wayfinding improvements and extensive special events programming.
The Shops at Hilltop’s reinvention as an all-inclusive, Asian-centric shopping and entertainment destination for the area’s dense and diverse population is scheduled for completion in mid-2019.
“The San Francisco East Bay region’s demographics are proven, and the consumer demand is there,” Lundin asserts. “Our goal for the Shops at Hilltop is to ultimately bring to this dense and diverse marketplace a walkable, mixed-used village that will be used as a vibrant community destination in the years to come.”
This article was originally published in the September 2018 issue of Shopping Center Business magazine.
— By Nellie Day, contributing writer. This article is part of the Retail Insight newsletter by Shopping Center Business, which includes a brief series of articles and videos surrounding some of the retail industry’s biggest gatherings, including ICSC Western Conference & Dealmaking. Some of the articles and the videos in the publication are created in conjunction with our content partners, which sponsor the newsletter. Click here to subscribe and to see archived newsletters.